Elderly Brace For Jump In Drug Costs

Analysis Finds Rx Drug Beneficiaries' Premiums Will Increase Average Of 24% In 2009

(AP)  Robert Clark describes himself as a bit of a tight wad. So he's a little perplexed about the news from his Medicare drug plan. His monthly premium will rise from about $25 a month to about $41 a month next year. And his wife, June, will face the same increase.

Clark, of Cumming, Ga., emphasized he just wants to be treated fairly. "I've always been careful about my money," he said. "I don't understand why it has to double."

While the increase falls short of a doubling, it's clear the Clarks, as well as millions of other seniors and the disabled, face hefty premium increases next year for prescription drug coverage.

Among the top 10 drug plans in terms of enrollment, the average monthly premium will increase anywhere from 8 percent to 63.7 percent, according to an analysis from Avalere Health, a management consulting firm. At the same time, those plans are reducing the number of medicines that they'll cover by about 9 percent.

The most popular plans will cover about 2,100 drugs, on average, a drop from slightly more than 2,300 drugs in 2008, Avalere found.

In short, the plans generally are asking Medicare beneficiaries to pay more for less during an increasingly difficult economic time.

"A number of factors are pushing plan pricing up," said Dan Mendelson, president of Avalere. "Seniors are using more branded and generic drugs. Drug prices went up a little bit as well. But perhaps most important, a number of plans - notably Humana - concluded that they underpriced and are making up for lost time."

A new drug benefit under Medicare kicked in at the beginning of 2006. All 44 million elderly and disabled beneficiaries can enroll in a private drug plan approved and heavily subsidized by the federal government. But the government subsidy next year ($53.97 a month for the typical enrollee) only covers part of the costs. All but the poorest participants also pay monthly premiums and co-payments, a share of cost when filling each prescription.

Participants don't have to stick with the same company, though. From Saturday through Dec. 31, they can choose prescription drug coverage from dozens upon dozens of insurance plans operating in their state.

"I'm going to shop around," Clark said.

Federal officials urge seniors to follow Clark's example, even though polling indicates that most won't, in large measure because of widespread satisfaction with the program, referred to as Medicare Part D.

"Plans change. Some plans have increased their prices. But also you change, meaning the drugs that you're taking, or your health status might be different, so it's important you shop around and compare and get yourself in the right plan," said Kerry Weems, acting administrator for the Centers for Medicare and Medicaid Services.

Medicare officials report that in every state, beneficiaries will have access to at least one prescription drug plan with premiums of less than $20-a-month. The one exception is Alaska where the lowest priced plan is $23-a-month. The centers include drug plans as well as plans that offer more comprehensive health benefits, called Medicare Advantage, in their calculations.

About 7.6 million people get drug coverage through a Medicare Advantage plan, while 17.4 million are in the drug-only plans.

Avalere only analyzed the drug-only plans. Among the 10 most popular drug-only plans, customers of Humana Inc., such as the Clarks, will experience the biggest price increases. The company's enhanced plan is jumping from $23.34 to $38.21 on average, though customers may pay less or more depending upon where they live. The company's standard plan is jumping from $25.52 to $40.83.

The two Humana plans rank second and third in terms of enrollment, following the AARP Medicare Rx Preferred Plan, administered by UnitedHealthcare. The premiums for the AARP preferred plan will go up 15.5 percent.

Humana became a major player in the drug benefit by offering the lowest premiums when the program began. In some states, residents could enroll for as little as $1.87 a month. Since 2006, Humana's premium for the standard plan has increased about 329 percent.

"Humana came into the market with the most transparent low-price strategy," said Lindsey Spindle, a vice president at Avalere. "They priced premiums extremely low to stand out from the crowd and it worked. Look at the numbers."

Tom Noland, a Humana spokesman, said in an e-mailed statement that the company's premiums next year "reflect the experience we've seen over the past three years, and our expectations around what will most interest our members and potential members going forward." He said initial prices were also based on the best available data at that time.

He said Humana's prices are now in line with many other plans.

When Avalere looked at the number of drugs that insurers will cover next year, it did not examine which types or brands were being dropped. Weems said Medicare took some drugs off its usage list because they weren't approved by the Food and Drug Administration.

If they are not smart enough to find a natural alternative with no side effects then paying the price is what they should do. The internet has change medicine for the better and people who think synthetic drugs laced with side effects are the answer probably believe that cholesterol is a disease also.

[mikezembill]

The republicans are at it again

[hennighg]

What''s the difference? The corporations will get you coming or going. If it''s not medicine, buy some gas. . .or food. . .or heating oil. . .or just about anything. I am so glad Mr. Obama is President-elect. Maybe, somewhere down the road a ways, fixed-income people and old people and working class people and poor people and teachers and firefighters and, well, the non-rich can catch a little bitty break. For now, don''t focus on any one thing, they have a couple dozen to hit you with.

[slim1h2o]

It''''s time to start thinking of our nation''''s health as a national asset to be protected and maintained, not just another money-making business scheme.

Posted by gce65 at 05:53 PM : Nov 15, 2008

Wow,,you said it perfectly, and well.

You can''t have a strong country without a strong and well cared for people..

[gce65]

Time for NATIONAL HEALTH CARE SYSTEM. Get the insurance racket out of it altogether. Call that socialized medicine, or call it communism if you like, but it''s time America had a health care system at least as good as the rest of the industrialized world. America is the ONLY industrialized nation without it.

It''s time to start thinking of our nation''s health as a national asset to be protected and maintained, not just another money-making business scheme.

[jss2003]

Additionally, what goes on between the FDA and these pharmaceutical companies? How can drugs be put on the market when they haven''t been thoroughly tested? Is it pressure from pharmaceutical companies or the crossing of the FDA''s palms with green?

[jss2003]

There is approximately an 800 to 2000% mark up on most drugs by the pharmaceutical companies. Nice going folks. Then we have the beloved donut hole where full price is paid for med''s. How much do these drug companies pay for TV, magazine and mailing advertising? There''s a rat in the wood pile somewhere.

[walt1944]

In anticipation of an Obama administration that would take away all the drug companies perks, shelters, and force them to suddenly pay more taxes on the huge profits they have been making under the Great Emperor Bush II, both the drug and insurance companies are BOTH raising prices, premiums, and allowing less for drug benefits claims.

The fear of NATIONAL HEALTH INSURANCE, also looms large among the drug companies who are scrambling to make as much money off of the highly-squeezed taxpayer as they can before Obama gets what he wants.

It is expected that other commodities such as energy, groceries (which never did go down with the drop in fuel prices anyway!), and all other consumer items will see huge price increases before Obama introduces his tax strategy to Congress.

After all, we would not want the highly-paid, highly-perked, highly-greedy, and totally-stupid corporate executives in Corporate America to miss their weekend "conferences", would we????

SIG HEIL, I ALWAYS SAID "FREE MARKETS" WOULD WORK (FOR THE WEALTHY!)!!!, BUSH!!!

[panhandlpete]

So why wouldn''t the health plans do exactly what the oil companies (and the mid east) have done to our economy....skin us while we are trying to survive. They want all these increases to go into effect prior to any nationalized plan. CONGRESS SHOULD NOT ALLOW THE MEDICAL COMMUNITY TO FUNCTION WITHOUT OVERSIGHT AND SOME STERN REGULATIONS TO PREVENT GREED.

Truthfully, it would be a blessing for many folks if they DID NOT take any prescribed medications.....just watch tv for a 24 hour period and see how many legal actions are being taken against harmful drugs which have been allowed by the FDA. Personal responsibility should be everyone''s priority when it comes to what they put in their body, not some ''professional'' who is pushing drugs to get a trip, a new car, or a bonus.

[estabwary]

This is what happens in a vicious cycle of polypharmacy and treating symptoms instead of causes. Everyone pays too much for increasingly bad care. Hopefully this bubble will burst too.

[slim1h2o]

Also CBS, why didn''t you run the article that more and more people are dropping out of the vicious circle called a "health care system" due to medical mistakes, high cost, misdiagnosis, etc etc etc.

I read that article on Yahoo news, if you care to read it.

Yes it''s time for a "National Health Care" system. Call it whatever you like, all I know is this one is broken, and beyond repair.

The doctors also need more training apparently, like sensitivity training would be nice too, and not just more medical training.

And they need to get off the notion that somehow it''s the patients fault for becoming sick, so there for, I won''t treat them.

[omnibus66]

The health care industry is virtually unregulated, and so is its greed. We desperately need a national health care program that fixes the profits of everyone involved at a reasonable level.

If you want to characterize it as Socialism, fine, as long as it works! The American people are fed up with the economic sodomy that we have endured at the hands of big corporations.

Enough is enough.

[slim1h2o]

But does anybody really believe what is going on now is NOT price gouging?

Posted by AmJoe at 07:18 AM : Nov 15, 2008

I agree, The entire health care system is in a state of ruin, because of this non-sense. And they justify these ridiculous prices by simply stating, that if you don''t take these drugs, or see your doctor once a year you will die.

Well have news for these idiots, we''re gonna die anyways.

And too, it''s simply greed driven. Nothing more, nothing less. GREED!

[truthislife1]

Good thing I live in Washington State. I''ll just have them put me down before it gets too expensive.

[cbsblogger]

I am so very happy to have moved from the US after retiring in 2001. I relocated in Hungary and have all of the same benefits of the Hungarians. Which means I have quality heath care ($25 USD a month)and the most I pay for the medicines I used is about $50 each month! The people are super and the country offers more than the US. Oh, very little crime! The Center of the Universe!

Posted by dag188 at 01:22 PM : Nov 14, 2008

The USA is no longer a country where first and 2nd world people want to live. The USA is a country where it''s only 3rd world people who desire to immigrate to, and where the ultra wealthy may wish to own a vacation villa in a gated community.

Quality of life here is going down down down the tubes. We can thank the influence of those ethno-centrics with their dual citizenship and their influential lobbies because the fall of the USA correlates to the rise in their influence since the 70s.

[bm6005]

This is another example of the lie that is American capitalism......
Posted by afmca

Hang onto your hat Bubbala, we''re going to see hard times like never before in the baby boomer gen. My dad lived thru the depression (he always told me about it) and I am preparing for another one!

[bm6005]

Do what I did, I quit taking 4 out of 5 drugs that I was taking! No bad side effects so far, did this about a year ago. I figure that eventually I''m going to die since no one gets out of here alive. Who gives a s.hit if it''s this year or next! If EVERYONE quit taking some of their drugs we could put the drug industry in a bind. As soon as we cut down drastically on driving the frickin'' gas prices are still going down. Same s.hit, diff day.

[afmca]

This is another example of the lie that is American capitalism. You would expect that if more people buy your product, the more efficiencies there would be in manufacturing, the lower the cost per unit, thus the price that you could sell it for would decline and you would still make the same profit. The pharmeceutical companies forgot that concept. But the American form of capitalism as backed up by their Republican cronies is to hook people and then bankrupt them. It is why we are in the midst of a recession, heading for a depression, and the American economic model will never be the same.

[ddaryl1]

and this is good for America how ??? These seniors who have worked there whole lives and have kept this county prosperitous are being finacially raped by the country they fought for, and beleived in...

what''s the point of patriotism when in the end you get spit on by the country you loved.

America has lost its way...

this political cartoon sums up the problem pretty well

http://tinyurl.com/5kj3t7

[cbsblogger]

I want socialized health care exactly like our Congress and President and all the other public servants have. It works well for them and when it doesn''t they fix it without the need for grandstanding or the do nothing C-SPAN hearings to impress the sheeple.